Remember that as of July 31, 56.1 million J.C. Penney shares, or 26% of those outstanding, were held short. That’s 11% higher than July 13 and nearly double that of late February, when J.C. Penney shares peaked at $43.18. Since then, the stock is down by nearly 50%.

Meanwhile the short positions in some of J.C. Penney’s rivals are decidedly smaller. As of July 31, only 8% ofKohl’s shares were held short, and just 2% of Macy’sshares were held short.

But instead of short positions in J.C. Penney falling as the stock has been halved throughout the last six months, investors have bet on still-more declines.

So what’s the catalyst? Apparently invest0rs are finding solace from the company’s meeting with analysts, where new(ish) CEO Ron Johnson talked up store plans and the new overall J.C. Penney experience.

Shares recently rose 6.7% to $23.57 after earlier declining as much as 12% in premarket trading. The stock is still down 33% this year.

Considering Johnson is the former retail chief atApple, investors still seem to believe he knows a thing or two about retail and will ultimately be successful in his turnaround efforts, despite two straight disappointing quarterly reports.

Earlier this year Penney stopped using promotions in favor of every day low prices. Johnson said on Friday that simplified pricing and marketing changes are leading to improved traffic and sales trends.

You want to get a real sense of how far sentiment has fallen regarding social-media stocks?

Tweet this: Facebook shares have been pushed down so far, so fast, that they now cost less than J.C. Penney shares. J.C. Penney shares right now are around $22.55, Facebook shares are around $21.75.

Now we know what you’re going to say: look at the valuations, dummy! (There, we saved you the trouble.) J.C. Penney’s PE (forward, one-year) is about 18. Facebook’s is 45 (and it’s trailing PE is 81). Plus, J.C. Penney has about 219 million shares outstanding; Facebook has 2.1 billion.

But say you wanted to buy only one share of each, to frame on the wall. It would cost less to buy a stock certificate in the biggest high-tech darling to come down the pike in years than to buy one for a century-old retailer struggling through a difficult turnaround in a moribund economy.

Look, the bottom line is, don’t kid yourself. Facebook shares might still sport a pricey valuation, but the stone-dropping stock price is telling you something.

J.C. Penney shares, no stranger to the roller coaster, spiked in the past hour, apparently after — yes, we are not kidding you — this tweet from Nina Garcia:

I’m @jcpenney’s HQ. Thank you Ron Johson for the walk through of JCP’s prototype. Get ready to shop! Its going to be a game changer!

You might think Garcia is some powerful Wall Street analyst, right? Or even some rain-making M&A banker? Or some private equity specialist?

Uh, nope.

Garcia is fashion director at Marie Claire and a judge on Project Runway. (Hey, we had to look it up, too.)

The comment hit the Twitterverse at 2:02 p.m. ET; the stock had started spiking in the minutes before that (did somebody leak the tweet? Call the SEC!) It’s come down a bit since, but it is still up 5% on the day, at $22.05.

It’s hard to understand why exactly the stock spiked on this comment from Garcia. That the company’s redesigning its stores, the referred to “prototype,” isn’t news. The new design was unveiled this week, as Forbes noted. A thumbs-up from somebody in the fashion world of Garcia’s stature is surely nice, but – as one of our readers pointed out — Garcia was retained by J.C. Penney this month as the “resident style voice and fashion collection curator.” She’s not exactly an uninterested observer.

The company didn’t give a reason for President Michael Francis’s exit, after only eight months on the job. But the announcement has led analysts to question the department-store chain’s ability to execute its strategy.

“In our view, the news is not good under any scenario,” says Paul Lejuez, an analyst at Nomura Equity Research. He maintained a neutral rating, while slashing his price target to $26 from $30. “The departure of Francis does not help build confidence that the grand turnaround plan envisioned in January will materialize.”

Shares recently fell 10% to $21.89, the lowest level since September 2010. The stock is the worst performer today in the S&P 500. It is down 38% this year.

Francis, a former Target executive, was hailed as one of the top minds in retail and was responsible for implementing J.C. Penney’s turnaround efforts. Instead, he quickly became the highest-level casualty amid the company’s sputtering plans to reinvent its image.

After the closing bell, the department-store operator announced President Michael Francis was leaving, effective today, after only eight months on the job.

Shares dropped 6.5% in after-hours trading to $22.75 in after-hours trading. The stock is down nearly 50% since early February.

J.C. Penney said CEO Ron Johnson, a former Apple and Target executive, would oversee the company’s marketing and merchandising functions.

Francis was Target’s top marketing executive for 10 years before he left last fall to take the position with J.C. Penney. He was one of Johnson’s first picks to help him run the company, and was with him on stage in January when the two unveiled Penney’s new sales pitch.

“The sudden nature of the departure underscores, in our opinion, the big-time mistakes JC Penney has made in articulating [its] new image,” said Brian Sozzi, an analyst at NBG Productions.

Shares of the beleaguered retailer finished down $6.57, or 20%, to $26.75, the biggest one-day percentage drop in its history.

By now, you know the dismal news. J.C. Penney late Tuesday dropped a tape bomb by reporting a quarterly loss, suspending its dividend to save cash and predicting it wouldn’t meet its previous annual earnings targets. The company, led by former Apple executive Ron Johnson, said its turnaround has been much harder than management originally expected.

Investors didn’t react kindly to the news. The stock, which fell for a third straight day, lost roughly $1.4 billion in market value today, according to WSJ Market Data Group. J.C. Penney’s market cap currently sits at about $5.8 billion.

The stock has declined 22% during the three-day losing skid.

Paul Vigna and Dana Mattioli discuss it all and more on the Markets Hub:

J.C. Penney surprised the market with a far weaker than expected first-quarter loss. The company also delivered a limp 2012 outlook and suspended its 20 cent/quarter dividend. Those are signs that at the least the new vision laid out by CEO Ron Johnson — a former Apple exec and golden boy — is running into more turbulence than expected.

The company is hosting a conference call that starts at 5 p.m. ET, which we will be live-blogging.

5:01 pm (EDT)

Where's the bar?

Paul Vigna

Listening to the ambient sounds at the J.C. Penney meeting, it sounds like a cocktail party. That's because the company is hosting this meeting live at SIR Stage 37 in New York City, rather than the usual call-in style. Not sure if they have some elaborate show planned, but after that earnings report the mood is surely to be a bit edgy. Ron Johnson's going to have to put on some show.

The company posted a loss of 75 cents a share, or $163 million, which after excluding various restructuring costs came out to an “adjusted” loss of 25 cents a share, or $55 million; still far worse than consensus (although as we explained, targets were all over the map.)

It also suspended the quarterly dividend of 20 cents, a sign they need to conserve cash.

The 2012 outlook wasn’t any better. It said it won’t meet the 2012 EPS forecast of $1.59, likely on inventory write-downs.

Shares are down 12% in late trading at $29.20.

This will be leave a mark on new CEO Ron Johnson, who brought an awful lot of energy and, well, pizzazz, with him when he came over from Apple. Apparently the Apple halo doesn’t extend to down-market department stores.

Johnson has gone from aspiration — the concept of creating a new kind of department store — to reality, and it isn’t pretty. Johnson acknowledges in the retailer’s first-quarter report, the first the company has released since he unveiled the new strategy, “Sales and profitability have been tougher than anticipated during the first 13 weeks.”

The biggest selling job JCPenney has right now is getting customers on board with its new anti-promotional stance. The company has “work to do to educate the customer” and to drive more traffic into its stores, Johnson says. Nonetheless, Johnson sticks with his original stance: “We are confident in our vision to become America’s favorite store.”

J.C. Penney reports fiscal first-quarter earnings after the bell today. Here are the important numbers and angles to keep in mind. All data courtesy of FactSet.

Earnings: Street consensus is for a loss of 5 cents a share (1 cent, non-GAAP), on sales of $3.45 billion. A year ago, the company earned 28 cents a share on sales of $3.94 billion.

Keep in mind: It’s unusual for the Street to have almost no feeling for how a company’s earnings will pan out, but that’s the situation this quarter with JCPenney. The company brought in former Apple retail executive Ron Johnson to shake up the company, and he instilled an aggressive new plan, eschewing discounting in favor of stable, and low, prices.

But the company hasn’t provided an earnings forecast, so the Street’s been left to fend for itself on this one. Estimates range anywhere from a profit of 5 cents a share to a loss of 51 cents a share. The consensus is just where the darts landed, so this one could be volatile depending upon what numbers hit the Tape.

Same-store sales are expected to be down anywhere from 11-13%, but again, no guidance.

Also, look for any read on progress with the company’s new “Town Square” strategy. Given his pedigree, Johnson will be given plenty of time to effect his turnaround. But eventually, he will have to deliver.

Not too shabby for a man who has endured some difficult calls over the years. Mr. Tilson’s initial short call on Netflix proved to be right, albeit way too early as he suffered through the stock’s sharp and sustained rally. But shares collapsed last summer, which proved some vindication to Mr. Tilson.

While the broad market drifts off its early highs, J.C. Penney shares just got a nice boost as the department-store retailer offered a full-year earnings forecast that came in well ahead of Wall Street’s expectations.

J.C. Penney shares are up 11% to $38 following the announcement. The stock is now up 8.2% in 2012.

The company is in the midst of a vast transformation under new CEO Ron Johnson, who knows a thing or two about retail after working as a retail executive at Apple.

J.C. Penney expects full-year profit at $2.16 a share (on a non-GAAP basis), while analysts polled by Thomson Reuters had been anticipating $1.65 a share.

From Mr. Johnson:

We are fundamentally re-imagining every aspect of our business and we fully expect the bold and strategic changes we are making to our operations will result in improved profitability. This should enable us to fund the transformation of jcpenney’s store experience, while at the same time returning value to shareholders with steady earnings growth.

About MarketBeat

MarketBeat looks under the hood of Wall Street each day, finding market-moving news, analyzing trends and highlighting noteworthy commentary from the best blogs and research. MarketBeat is updated frequently throughout the day, helping investors stay on top of what’s happening in the markets. Lead writers Paul Vigna and Steven Russolillo spearhead the MarketBeat team, with contributions from other Journal reporters and editors. Have a comment? Write to paul.vigna@wsj.com or steven.russolillo@wsj.com.